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U.S. Cellular reports lower profits in Q3

Posted: , by Alan F.

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U.S. Cellular reports lower profits in Q3
The carrier offers the wildly successful Samsung Galaxy S III

The carrier offers the wildly successful Samsung Galaxy S III

U.S. Cellular reported net profits of $35.5 million in the third quarter vs. profits of $62.1 million the prior year. Service revenue, at $1.036.4 billion, was just shy of the $1.036.6 billion reported in the same period last year. The company added 19,000 net new retail customers versus a loss of 23,000 last year. Average revenue per post-paid user rose 4% to $54.34 from $52.41 while total ARPU increased 3 percent to $59.57 from $58.09. Speaking of postpaid customers, those using smartphones now make up 38.6% of U.S. Cellular's subscribers, up sharply from 26.2% in the 2011 third quarter. 53% of phones sold in the period were smartphones, up from 39.9% last year, and half of those smartphone sales were of 4G LTE enabled devices.

U.S.Cellular's LTE signal now reaches 30% of its customers, a figure that the mobile operator says will reach 58% by the end of this year. Breaking down the net new additions, 38,000 post-paid customers left the carrier while 57,000 new pre-paid customers were obtained by U.S. Cellular. Churn for post-paid came in at 1.7% and post-paid still represents 93% of the company's business.

U.S. Cellular's U Prepaid at Walmart, now available in 400 stores, helped the carrier add that large number of new pre-paid accounts. Also helping the results in the quarter was the Samsung Galaxy S III which was in high demand after being added to the U.S. Cellular lineup, but led to higher subsidies paid especially as the carrier pushed 4G LTE devices to eligible customers.

"We increased gross postpaid customers seven percent through effective marketing and sales programs such as our new Hello Better advertising campaign and by offering high-demand devices like the Samsung Galaxy S III, though our postpaid churn rate remained high. Profitability declined, however, as we incurred higher subsidies to encourage adoption of 4G LTE devices, which represented 50 percent of smartphone sales. While the cost to subsidize these devices has a short-term impact on profitability, we expect longer-term benefits as customers migrate to the more efficient 4G LTE network, including growth in ARPU and lower capital expenditures for our legacy networks."-Mary N. Dillon, CEO, U.S.Cellular

source: U.S.Cellular
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posted on 07 Nov 2012, 08:47

1. cncrim (Posts: 910; Member since: 15 Aug 2011)

people holding back for the Q4.... duhhhhhhhh

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